Deutsche Bank Downgrades Biogen-IDEC (BIIB) to Hold; Valuation Call
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Deutsche Bank downgrades Biogen-IDEC (Nasdaq: BIIB) from Buy to Hold. Maintaining $55 price target.
Deutsche analyst says, "We are downgrading BIIB shares from Buy to Hold, as we believe the shares are now fairly valued. When we upgraded, we argued that at about $42/share BIIB shares were pricing in an overly pessimistic Tysabri scenario (i.e. that it would decline dramatically or even be pulled from the market). Tysabri, however, continued to grow. In our opinion, the stock is now pricing in reasonable Tysabri expectations and no longer warrants being one of our "top picks" in 2009."
"Shorter term, we think upside could be driven by wise use of cash. We continue to hope BIIB will use at least some of its cash to buy stock back (similar to 2007's "Dutch Tender") and/or complete a smart acquisition in the neuro or cancer fields...Longer term (1-2 years), BIIB remains one of our favorite names...In addition, BIIB has 7 drugs in ph 3, for which the stock reflects little -- if any -- value."
To see more analyst ratings on BIIB Click Here.
Biogen Idec Inc. is engaged in the development, manufacturing, and commercialization of therapies.
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